After facing rejection at $2567, Ethereum [$ETH] has traded within a thin margin. The altcoin has remained stuck between. $2.3k and $2.4k, reflecting a market at a decision point.
As of this writing, Ethereum traded around $2420, marking a 2.5% slip on the daily charts. Although $ETH has slowed down significantly, high net worth traders are still showing demand for longs.
Ethereum whale returns with a $4.8 million bet
With Ethereum struggling to maintain an upward momentum, traders who had earlier opened long positions are bleeding. According to CoinGlass data, over $63.6 million worth of long positions were liquidated compared to $12.6 million in shorts.
When longs are forced to exit, it typically adds selling pressure to the market, thus amplifying a price decline. Despite the rising liquidation risks, some investors, especially whales, are holding firm and continue to open new positions.
Lookonchain reported that a trader opened a 25x long on 18,587 $ETH worth $44.85 million. This whale returned and placed this bet after seven months of inactivity.
When the whale takes a long position, it shows optimism, anticipating the slowdown will ease and see Ethereum make more gains.
In fact, traders on Binance and OKX are mostly opening long positions. Long/Short Ratio across these two exchanges holds above 1, with Binance leading at 2.7.
Often, strong demand for leveraged positions has brought about strong short-term price pumps.
Are whales on the spot weakening the market?
While whales on the Futures expect a price of a pump, on the Spot, one whale has been aggressively offloading. According to Lookonchain, the whale has deposited a total of 103,252 $ETH worth $253 million into multiple exchanges.
After the deposit the wallet still holds 64,603 $ETH worth $155 million, which are also likely to be sold. The continued selling pressure has caused significant pressure on the market, thus weakening the market structure.
In fact, momentum indicators have started to show this market weakness. Since making a bearish crossover, the Relative Strength Index (RSI) has dropped to 63.
Although it has dropped, it still holds within the bullish zone, suggesting buyers are still active in the market. The MACD also formed a bearish crossover, further validating this trend shift.
The two bearish crossovers suggest that sellers are becoming aggressive. Often sellers’ aggressiveness has resulted in more losses.
If the bearish trend shift holds, Ethereum is likely to drop to $2.2k. However, if bulls on the derivatives continue to deploy capital, the demand will boost $ETH to finally flip $2.5k.
Final Summary
- An Ethereum whale returned after seven months of dormancy and opened a 25x long position on 18,587 $ETH worth $44.85 million.
- Ethereum’s upside momentum is weakening, with the MACD and RSI both making a bearish crossover, indicating an attempted bearish takeover.
